Compared to national trends the Denver real estate market charts its own course.
Nationwide, existing home sales reached their highest point in a year, while the sale of distressed homes waned — a reflection of the recovering economy. Meanwhile the Denver real estate market had a small increase in active listings, giving buyers some breathing space. The metro’s average sales price continued to climb as the city enters a phase of new financial prosperity.
Signs of Positive National Growth
After years of a troubled and periodically unstable market, national home sales and inventory looked pretty healthy this summer. There were 2.37 active listings, representing a balanced inventory stock of 5.5 months.
The average sales price of existing homes in the U.S. jumped 4.9 percent from June, 2013 to August 1, 2014. An average of $222,900 for all types of housing. It was the 29th straight month of year-over-year gains. Although the South has a slight advantage over other real estate markets, there was positive growth in every region of the nation.
Another encouraging sign is sales of distressed homes have declined, from 15 percent a year ago to just 9 percent by the end of July — the first time since 2008 these figures have been in the single digits.
“More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise,” says Lawrence Yun, the chief economist for the National Association of Realtors. Yun’s overall assessment is that “the deepest housing wounds suffered during the Great Recession are beginning to fully heal.”
Hints of Relief in the Mile High City?
The Denver real estate market continues to chart its own course of success as buyers adjust to the fact this prime market was undervalued for decades. As of August 1st the city had the second smallest inventory of any market nationwide, with just 1.7 months available. But for the Denver real estate market, this is actually an improvement. Over a year ago there was a 1.6 month supply of listings. For seven out of eight months now, the decline in inventory has been moderating.
The biggest pinch is in the lower-end Denver real estate market. By the end of July there was only a three-week supply of homes selling between $100,000 and $300,000. For luxury homes, there was a 17 month supply.
The low inventory in the affordable market was a factor of rising prices throughout the summer. With average sales prices up 17 percent over the last year, housing costed city residents over a third of their disposable income. Fortunately, the city also experienced lower unemployment to compensate for the price hikes.
Sources: http://www.realtor.org/news-releases/2014/08/existing-home-sales-continue-to-climb-in-july; http://www.denverpost.com/business/ci_26289384/price-hikes-slowing-but-denver-housings-verge-unaffordable